Citi gas trades among those that sparked UK probe-Guardian

LONDON

LONDON Dec 7 Citigroup has said its
traders made two of the gas deals that prompted investigations
by Britain's financial and energy regulators, Britain's Guardian
newspaper reported on Friday, although Citigroup has denied any
impropriety in the matter.

On Sept. 28, Citigroup traders conducted two of six deals
which priced gas at 58 pence, substantially below the price of
other deals earlier in the day and later, the Guardian said.

The Guardian said that Citigroup was not responsible for the
first deal, which it said would be the likely focus of the
Financial Services Authority's attention, and that it was
unknown which companies made the other four gas trades at that
price on Sept. 28.

A Citigroup spokesman declined to confirm whether Citigroup
had made the trades in question and said it had done nothing
improper.

"Citi's activity in the natural gas market on Sept. 28 was
related to client activity, and all Citi trades were completed
at levels consistent with the context of the market at the time
they were executed," he told Reuters in an e-mailed statement.

In its report, the Guardian said: "There is no suggestion at
this stage that Citigroup has acted illegally or improperly."

The FSA and energy regulator Ofgem are investigating
allegations made by a whistleblower that traders have
manipulated Britain's wholesale gas prices.